Jackson, Michael J. 1949–
Michael J. Jackson
Chairman and chief executive officer, AutoNation
Born: 1949, in Philadelphia, Pennsylvania.
Education: Saint Joseph's College, BA, 1971.
Family: Married Patricia; children: one.
Career: Mercedes-Benz North America, 1974–1979, technical specialist and, later, job in marketing; Euro Motorcars, 1979–1990, managing partner; Mercedes-Benz North America, 1990–1997, variety of marketing positions, including executive vice president, marketing; Mercedes-Benz USA, 1997–1999, president and, later, CEO; AutoNation, 1999, CEO and director; 2003–, CEO, director, and chairman.
Awards: All-Star Dealer Award, Sports Illustrated, 1990; Industry Leader of the Year, Automotive Hall of Fame, 2003; two-time nominee to All-Star Team of automotive executives, Automotive News ; named four times to annual Marketing 100, Advertising Age.
■ The auto industry veteran Michael J. Jackson impressed industry observers in the 1990s when he totally reshaped the stodgy image of Mercedes-Benz in the United States. The turnaround, driven by the addition of sportier models and an advertising campaign designed to appeal to a younger, more affluent market, lifted the German automaker from the doldrums in the U.S. auto market and made Mercedes-Benz one of America's best-selling luxury brand names.
JACKSON HEADS AUTONATION
Among those particularly impressed by Jackson's accomplishments at Mercedes-Benz USA was H. Wayne Huizenga, the Florida-based entrepreneur and businessman best known for his earlier leadership of Waste Management and Blockbuster
Entertainment. In the late 1990s, Huizenga was struggling to make a go of AutoNation, the country's largest publicly traded chain of auto dealerships, spun off from Republic Industries, a company with its roots in the waste-management business. In 1999, Huizenga sought out Jackson and asked him if he would be interested in taking on the challenge of running AutoNation, which at that point was struggling. Jackson accepted.
Pressured by the high cost of its rapid expansion, AutoNation in 1999 managed to make an operating income of only $463.1 million on revenue of just over $20 billion, for an operating margin of only 2.3 percent. The previous year the company reported operating income of $356.3 million on sales of roughly $12.7 billion, representing an operating margin of 2.8 percent. Huizenga hoped that the company's operating margins would improve under Jackson's leadership.
Another major problem for AutoNation, and one that was quickly identified by Jackson, was the company's venture into the used-car superstore market. The company had hoped that its innovative megastore approach to used-car sales would give it an edge over its principal competitors in the market—franchised new-car dealers. In the end, however, the scheme was a failure. Less than three months after joining AutoNation as its president and chief executive officer on October 1, 1999, Jackson announced that the company was shutting down 23 of its used-car megastores and integrating the remainder with the chain's new-car dealerships.
In 2000, AutoNation's first full year under Jackson as CEO, the company posted an operating income of $721 million on sales of $20.6 billion, representing an operating margin of 3.5 percent, a significant improvement over its performance in 1999. With the economy facing a recession in 2001, AutoNation's operating margin once again came under pressure, falling to 2.6 percent, or operating income of nearly $515 million on revenue of just under $20 billion. Operating margins widened to 3.7 percent in 2002, when the company reported operating income of $716 million on sales of roughly $19.5 billion.
JACKSON'S EARLY WORK AS A MERCEDES-BENZ TECHNICAL SPECIALIST
It was a serendipitous car breakdown in 1971 that helped steer Jackson into a career in the auto industry. After graduating from Saint Joseph's College in Philadelphia, his home-town, with a bachelor's degree in political science, Jackson was scheduled to enroll at Georgetown Law School in Washington, D.C., to fulfill his dream of becoming a lawyer. While Jackson was on a trip with his wife, Patricia, the 1959 Mercedes 190SL they were driving broke down. Hard pressed for money at the time, Jackson negotiated a deal with the local Mercedes dealership to work off his repair bill by doing odd jobs around the garage.
After a couple of months working around the dealership's garage, Jackson found himself so fascinated by the car business that he abandoned his plans for a career in law. Although he had no formal training as an auto mechanic, he discovered that he had a natural affinity for car repair and took a full-time job with the dealership as a service technician. In 1974 Jackson signed on with Mercedes-Benz of North America (MBNA) as a technical specialist. In this post he traveled around the country to Mercedes dealerships to help mechanics resolve technical problems.
He worked as a technical field representative for MBNA for a couple of years, after which he decided that he was on the wrong side of the business. As he told Steve Finlay of Ward's Dealer Business, "I figured out I'm on the technical end of the business without an engineering degree working for an engineering-oriented company. So I figured I better move over to the sales and marketing side of MBNA."
JACKSON'S CAREER IN SALES AND MARKETING
After five years at MBNA, Jackson in March 1979 teamed up with a group of European investors to buy Euro Motorcars, a Mercedes dealership in Bethesda, Maryland. This was the same place where years earlier he had done odd jobs in return for repairs on his 190SL. Over the next decade Jackson guided the dealership from annual sales of approximately three hundred Mercedes cars to sales of about 1,700 autos, including not only Mercedes but also such other foreign brands as Acura, Bentley, and Saab. Under Jackson's leadership, Euro Motorcars grew into a regional dealer group that owned and operated 11 automotive dealership franchises. In the late 1980s Jackson was tapped to head the Mercedes U.S. dealer council, a position he held for two years. He used the post to lobby Daimler-Benz to be more responsive to U.S. auto-buying tastes and trends. The automaker's failure to do so had caused Mercedes sales in the United States to plummet to 58,000 by the end of the decade, roughly half what it had been in the early 1980s.
JACKSON BECOMES MERCEDES-BENZ EXECUTIVE
Jackson's keen grasp of U.S. auto-buying tastes was not lost on DaimlerBenz executives, who in 1990 asked the dealer if he wanted to return to MBNA to see if he could reverse the company's declining fortunes in the U.S. market. Although he was doing well as a dealer, Jackson told Finlay, he decided to accept the challenge. It was a difficult time and not a challenge he would care to experience again. "But it really was a chance to make changes. If everything was beautiful, they wouldn't have asked me to come back and they wouldn't have been receptive to change."
Indeed, there were plenty of changes at MBNA. Jackson, who returned to MBNA as senior vice president for sales and marketing in July 1990, pushed Stuttgart-based DaimlerBenz executives relentlessly to produce sportier, more stylish cars that better reflected U.S. auto buyers' demands. He was also responsible for significant changes in the Mercedes advertising campaign in the United States, scrapping the company's ponderous commercials touting its engineering expertise in favor of lighter, music-filled ad spots more suited to U.S. tastes.
Other changes credited to Jackson included a revamped customer care strategy designed to convert Mercedes loyalists into advocates and a restructuring of the Mercedes-Benz retail organization. As part of the latter move, the company asked its U.S. dealers to sell Mercedes-Benz vehicles exclusively, buying out those who refused to sign on to the new program. Particularly successful was the Jackson-directed change in U.S. marketing strategy. Despite strong resistance from Stuttgart, Jackson managed to push through a U.S. marketing campaign that portrayed Mercedes cars as youthful and fun. It was not an easy sell. As Jackson told Ward's Dealer Business, "Not only did 'youthful' and 'fun' not apply to the old Mercedes, the company wouldn't want them to apply."
To help boost Mercedes sales in the United States, Jackson pressured dealers to cut their markup over invoice from 13 to 7 percent. This move, coupled with all the other changes in Mercedes strategy, reinvigorated the company's U.S. sales, which rose from fewer than 60,000 at the end of the 1980s to nearly 190,000 in 1999. For his role in reversing the company's fortunes, Jackson was steadily moved up through the Mercedes management ranks, and in March 1997 he was named president of Mercedes-Benz USA. Two years later he was given the added responsibility of CEO.
APPOINTMENT TO CEO OF AUTONATION
Jackson's appeal to Huizenga as a successful auto retailer and manager was obvious. After a lengthy search for likely candidates to lead his AutoNation into the new millennium, Huizenga decided that Jackson was the perfect man for the job. According to a company press release, in announcing Jackson's appointment as AutoNation's new CEO in late September 1999, Huizenga said: "Mike has a great combination of automotive retailing experience from both the dealer and the manufacturer perspective. He also understands what it takes to be a successful brand marketer as well as a successful automotive retailer."
Jackson wasted no time in getting down to business at AutoNation. In addition to closing down the company's unsuccessful used-car megastores, the new CEO moved quickly to bring the company's spiraling costs under control. Closure of the superstores cut AutoNation's payroll by roughly 1,800 employees, to which Jackson soon added two hundred of the company's six hundred workers at its headquarters in Fort Lauderdale, Florida.
Despite the economic recession that got under way in early 2001, AutoNation, under Jackson's direction, still managed to post respectable financial numbers through the early 2000s. Although the company's net income after taxes dipped in 2001 to $245 million from $328.1 million in 2000, it bounced back dramatically in 2002, hitting $381.6 million. For the first three quarters of 2003, AutoNation's net income totaled more than $425 million, and its operating margin never slipped below 3.8 percent.
A major challenge faced by Jackson in his first couple of years at AutoNation was the establishment of a corporate culture that reached out to every employee in the company's farflung chain of more than 370 new-car dealerships in 17 states. In most cases, AutoNation's field employees faced the difficult transition from working for a privately held auto dealership to being part of a large, $20 billion corporation. To help ensure that all AutoNation employees felt as though they were integral to the corporation headquartered in southern Florida, Jackson instituted a program of informal get-togethers for employees and their families.
In addition to its network of new-car dealerships, more than 60 percent of which, in the early 2000s, was concentrated in the Sunbelt states of California, Florida, Nevada, and Texas, AutoNation fully exploited opportunities for online marketing. In 2002 the company generated just over 11 percent of its $19.5 billion revenue, or $2.2 billion, from online sales. To attract online buyers, AutoNation promoted "no-haggling" Internet sales policies and offered a full-scale Web site that offered consumers several tools for making the car-buying experience as efficient and pleasant as possible.
JACKSON'S RECOGNITION BY PEERS
Jackson's accomplishments in the auto industry were widely recognized by his peers. In 1990, while he was still running the Euro Motorcars dealership network, he was given the Sports Illustrated All-Star Dealer Award. He was twice named by Automotive News to its All-Star Team of automotive executives and four times selected as a member of Advertising Age 's Marketing 100. In December 2003 the Automotive Hall of Fame, based in Dearborn, Michigan, named Jackson as its Industry Leader of the Year for 2003. On February 1, 2004, he was honored by the Automotive Hall of Fame at its annual awards luncheon in Las Vegas, during the annual convention of the National Automobile Dealer Association. In announcing the award, according to a report in Collision Repair Industry Insight, the Hall of Fame's president, Jeffrey Leetsma, said that Jackson's "leadership at AutoNation is significant not only in the sheer volume of units delivered but in raising the bar in all areas of the customer experience."
See also entries on AutoNation, Inc. and Daimler-Chrysler AG in International Directory of Company Histories.
sources for further information
"Automotive Hall of Fame Selects AutoNation CEO Jackson 2003 Automotive Industry Leader of the Year," Collision Repair Industry Insight, December 8, 2003.
"AutoNation at Goldman Sachs Tenth Annual Global Retailing Conference," Fair Disclosure Wire, September 4, 2003.
Dyer, Leigh, "Auto Sales Contribute Only Part of Dealerships' Profits," Charlotte Observer, December 22, 2003.
Finlay, Steve, "How a Dealer Revived Mercedes-Benz," Ward's Dealer Business, December 1, 1998.
Harris, Donna, "AutoNation Striving for Corporate Culture," Automotive News, January 29, 2001.
Mann, Joseph, "AutoNation Chief Says Vehicle Sales Gaining Speed Nationwide in 2003," South Florida Sun-Sentinel, May 15, 2003.
Patel, Purva, "AutoNation Sees Higher Profits on Stronger Car Sales, Cost-Cutting Measures," South Florida Sun-Sentinel, October 31, 2003.
Ritzler, Karl, "Florida-Based AutoNation Stumbles over Used-Car Hurdles," Atlanta Journal and Constitution, December 14, 1999.
Seemuth, Mike, "AutoNation Finance Chief, CEO Sell $6M in Stock," Daily Business Review, August 7, 2003.
Welch, David, "AutoNation's Driver Takes a Sharp Turn," BusinessWeek, March 13, 2000.